Name(s) _Kaustav Roy Choudhury Roll No(s).

PGP/20/274
Section: E

Assignment based on 2014-15 Annual Report of Castrol India Ltd.

I. Profitability Ratios:

Ratios Numerator Amount Denominator Amount Ratio

PAT= 615.2 crore Net Sales= 3285.3 18.72%
Net Income crore
Ratio

PAT= 615.2 crore Average Shareholders 11.47%

Return on Equity Funds= 536.2
Equity crore
(ROE)

Return on PAT= 615.2 crore Average Total assets= 39.01%

Assets 1576.85 crore
(ROA)

Comment: The Company maintains a healthy net income as compared to the

sales. Also the return on equity is 11.47% while the peer average is 14.78%. The
return on asset is very high signifying maximum use of assets.
II. Efficiency Ratios:

Ratios Numerator Amount Denominator Amount Ratio

Net Sales=3285.3 crore Average Total Assets= 2.08
Total Assets 1576.85 crore
Turnover

COGS= 1388.4 crore Average total 4.14

Inventory inventory= 335.05
Turnover crore

Accounts Net Sales= 3285.3 crore Average Accounts 12.93

Receivables receivable= 254 crore
Turnover

Comment: For all the assets the turnover is greater than 1. Thus the assets are
being used efficiently. Also the company maintains very little amount of account
receivables. Most of its business is in cash.

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Name(s) _Kaustav Roy Choudhury Roll No(s).PGP/20/274
Section: E

III. Liquidity Ratios:

Ratios Numerator Amount Denominator Amount Ratio

Current assets=1333.3 Current liabilities= 1.24
Current crore 1071.1 crore
Ratio

Current assets- Current liabilities= 0.87

Quick Ratio Inventory- prepaid 1071.1 crore
expenses= 933 crore

Comment: The Company can meet its short term obligations as per the current
ratio but for urgent need of money it will face difficulty as the quick ratio is less
than 1. Both the ratios are lo as compared to the industry standards.
IV. Long Term Solvency Ratios:

Ratios Numerator Amount Denominator Amount Ratio

Total Assets= 1661.6 Equity Shareholders 2.88
Financial crore Fund= 575.6 crore
Leverage
Ratio

Noncurrent liabilities= Equity Shareholders 2.58%

Debt to 14.9 crore fund= 575.6 crore
Equity Ratio
(D/E)

Comment: The Company has very little long term borrowing and most of its
money is through equity shareholders capital.
Valuation Ratios:

Ratios Numerator Amount Denominator Amount Ratio

Market price per share= Earnings per share= 35.58
Price 442.65 12.44
Earnings
Ratio (P/E)

Market price per share= Book value of each 35.58

Market 442.46 share= 12.44
Value to
Book Value
Ratio (M/B)

Comment: The Company is valued at 35 times its book value by its investors.
Thus the investors are willing to invest Rs. 35 to get Rs. 1 in return. This means
that they expect higher growth returns in the future.

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